“However, some may argue that DFARS 217.202(2) doesn’t limit applicability to only major systems. I think this is what you are concerned with. Am I correct?”
Precisely my concern Jamaal!
Thank you for translating
DFARS 217.202(2) appears, to me, to contemplate use of contract options for the provision of advanced component development, prototype, or initial production of technology developed under the contract or the delivery of initial or additional items.
217.202(2) also invokes the limitations at 234.005-1.
I suspect that 217.202(2) references the limitations at 234.005-1 not because the intent was to confine use of such an option to Major Systems Acquisition, but because the limitations were already listed at 234.005-1. So, someone decided it would be easier to reference the limitations at 234.005-1 instead of repeating them at 217.202(2). Admittedly, speculation.
There is an argument being made within my office that the fact that 217.202(2) references the limitations at 234.005-1, it must mean one of the inherent limitations on the option described at 217.202(2) is that it can only be used for Major Systems Acquisition, because the limitations of 234.005-1 appear under Major Systems Acquisition.
In short, I'm trying to argue that 217.202(2) would "allow" such an option, and 234.005-1 describes the limitations placed on the option.